Will high gas prices force the Fed to stop or slow down money printing?

[Locutus]

Quote from krazykarl:

The fed is not printing money - the only people who think so are the uneducated.

Well it depends on your definition of "printing money". They aren't monetizing debt directly because they don't transact with the treasury directly, but they are definitely adding to the money supply.

Of course they can also "unprint money" in the future, which is why the Weimar/hyperinflationary scenario is far-fetched (they couldn't easily unprint money then as it wasn't digital), but they are definitely adding USD which would not be there without the FED.

 

[377OHMS]

Quote from latinotrader:

$3+ gas has a high political cost

The Obama regime is looking for $8.00 per gallon gasoline in order to reduce the carbon emissions of the country.

 

[krazykarl]

Quote from Locutus:

Well it depends on your definition of "printing money". They aren't monetizing debt directly because they don't transact with the treasury directly, but they are definitely adding to the money supply.

Of course they can also "unprint money" in the future, which is why the Weimar/hyperinflationary scenario is far-fetched (they couldn't easily unprint money then as it wasn't digital), but they are definitely adding USD which would not be there without the FED.

My definition of "printing money" is to increase M3 - that is not happening right now.

 

[Larson]

Quote from TGregg:

If voters keep sending people to DC who want to keep adding to the debt a trillion bucks at a time, the fed has to keep printing it.

Absolutely. Therefore the fed currently has a single-mandate to print money. Watch what happens if they start raising rates. lol. The Volcker solution scares them to death and it is no longer even possible. These jokers are f@$3! and they know it.

 

[Good Fortune]

Quote from krazykarl:

The fed is not printing money - the only people who think so are the uneducated.

What do you call this? Reinvesting the proceeds from the expiring mortgage-backed securities on its balance sheet into the direct purchase of long-term Treasury securities.

When you have billions of dollars of worthless non performing loans that get packaged into bonds and bought by the Fed?

Is the Fed not writing a check to it's own self and or then crediting the balance sheet of the banks in question - clear?

Why is that not printing money? Where did this money to pay these obligations come from?

Is it not like calling up your broker about a demo account you just depleted and saying, "I need another 100K." And, he then credits your account, and you can still trade?

Will not some of this additional money sitting on the bank balance sheets here find it's way into the system? Will this not be additional money into the system? Does supply and demand now come into play?

What is your macroeconomic assessment?

 

[krazykarl]

Quote from Good Fortune:

What do you call this? Reinvesting the proceeds from the expiring mortgage-backed securities on its balance sheet into the direct purchase of long-term Treasury securities.

When you have billions of dollars of worthless non performing loans that get packaged into bonds and bought by the Fed?

Is the Fed not writing a check to it's own self and or then crediting the balance sheet of the banks in question - clear?

Why is that not printing money? Where did this money to pay these obligations come from?

Is it not like calling up your broker about a demo account you just depleted and saying, "I need another 100K." And, he then credits your account, and you can still trade?

Will not some of this additional money sitting on the bank balance sheets here find it's way into the system? Will this not be additional money into the system? Does supply and demand now come into play?

What is your macroeconomic assessment?

What the fed is doing right now is manipulating the bond market: keeping long-term interest rates low through buying treasury debt - it has nothing to do with printing money.

No, the fed is not writing a "check to itself and crediting the banks." Your thesis is wrong. The fed has a significant amount of assets and a balance sheet of around 14T as of 2009 that they can expand with the printer, but that expansion is not going into the financial system directly. The impact the fed's actions have come from people getting more and cheaper access to long-term debt.

All the people screaming how bad this is: I would agree with you that the Fed's actions are bad if they were pumping money into the system, but that's not what they're doing.

 

[kashirin]

Quote from krazykarl:

What the fed is doing right now is manipulating the bond market: keeping long-term interest rates low through buying treasury debt - it has nothing to do with printing money.

No, the fed is not writing a "check to itself and crediting the banks." Your thesis is wrong. The fed has a significant amount of assets and a balance sheet of around 14T as of 2009 that they can expand with the printer, but that expansion is not going into the financial system directly. The impact the fed's actions have come from people getting more and cheaper access to long-term debt.

All the people screaming how bad this is: I would agree with you that the Fed's actions are bad if they were pumping money into the system, but that's not what they're doing.

what they do now goes directly to the economy as they de facto monetize debt which government spends right away

I don't really understand how anyone can spin it the other way
From any point of view Fed prints money, those money go directly into the economy and that's why we have a surge in worldwide inflation

 

[pupu]

http://www.youtube.com/watch?v=QR2FYemIokE

 

[denner]

Quote from kashirin:

what they do now goes directly to the economy as they de facto monetize debt which government spends right away

I don't really understand how anyone can spin it the other way
From any point of view Fed prints money, those money go directly into the economy and that's why we have a surge in worldwide inflation

Krazykarl ranks amongst the elite group of Bernanke bootlicker's on this site. You'll never find a single post critical of Bernanke's madness.

And I love the fact that nothing is subject to alternative interpretation with these guys. He knows "the facts" and everybody else is an ignoramus. Well if that's the case, there's a long list of highly qualified and well respected opinions that disagree with this group.

 

[denner]

Quote from krazykarl:

My definition of "printing money" is to increase M3 - that is not happening right now.

The Fed discontinued the reporting of M3 almost 5 years ago, so how are we supposed to discern any changes?